Japanese confectionery shop; wagashi store
A shop that makes and/or sells traditional Japanese sweets (wagashi).
駅前に新しい和菓子屋ができた。
A new Japanese confectionery shop opened in front of the station.
祖母はよく近所の和菓子屋で最中を買ってくる。
My grandmother often buys monaka at the neighborhood wagashi shop.
和菓子屋 specifically sells traditional Japanese sweets, while 菓子屋 is the general term for any confectionery shop.
和菓子屋 specifically sells traditional Japanese sweets, while お菓子屋 can cover both Japanese and Western confections.
Compound of 和菓子 (wagashi, 'Japanese sweets') + 屋 (ya, 'shop').